RE: Offer13 Dec 2025 16:31
Grounds for Challenge
Fairness to the Class: The main challenge is arguing the scheme unfairly disadvantages your class of shareholders, as the court ensures fairness for each class.
Insufficient Information/Disclosure: If the company didn't provide enough detail (like valuation reports) for shareholders to make an informed decision, this can be grounds for challenge, notes Practical Law and LexisNexis.
Procedural Irregularities: Issues with how meetings were called, votes counted, or how the process was managed can be challenged.
Valuation Discrepancy: While the scheme controls the process, if the offer undervalues shares (e.g., compared to intrinsic worth or hostile offers), you can present evidence to the court showing this unfairness.
How to Challenge
Attend and Vote at the Meetings: Actively participate in the court-convened meeting and vote against the scheme, ensuring you're counted as a dissenting member.
Lodge Objections with the Court: File formal objections with the High Court when the company applies for sanction.
Present Evidence: Provide expert valuations, analysis, and arguments to the court demonstrating the unfairness or undervaluation of the offer.
Seek Legal Counsel: Engage specialist lawyers experienced in schemes of arrangement to guide you through the complex legal process and represent you in court.
Key Court Role
The court's role is to ensure the procedure is fair and that the interests of the class as a whole are respected, even if some individuals disagree. A judge must be convinced the scheme is reasonable and doesn't unfairly disadvantage any dissenting party before sanctioning it.
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